Selected comparative statement data for Queen Products Company are presented bel

Question

Selected comparative statement data for Queen Products Company are presented below. All balance sheet data are as of December 31.

2017

2016

Compute the following ratios for 2017. (Round answers to 1 decimal place, e.g. 1.6, or 1.6% .)

2017

2016

Net sales $756,000 $723,000 Cost of goods sold 482,500 444,500 Interest expense 7,600 4,700 Net income 49,000 42,000 Accounts receivable 122,500 109,000 Inventory 81,500 74,500 Total assets 581,000 504,900 Total common stockholders’ equity 429,500 321,800

Explanation / Answer

Profit Margin for 2017 = 49000 / 756000 = 6.48%

Asset Turnover = Sales / Average Assets = 756000 / ( 581000 + 504900)/2 = 1.39

Return On Assets = 49000 / / ( 581000 + 504900)/2 = 9.02%

Return On Equity = 49000 / (( 429500 + 321800)/2) = 13.04%

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